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Strategic and Business Planning
Strategic and
Business Planning
Level 4, Dominion Building, 78 Victoria Street,
PO Box 2251, Wellington, New Zealand
Phone: +64 4 472 8058 Fax: +64 4 471 0813
www.sparc.org.nz
www.sparc.org.nz
87186 – 05/2006
STRATEGIC AND BUSINESS PLANNING
TABLE OF CONTENTS
Table of
contents
Introduction
5
The purpose of this guide
6
Linkage to other guidelines
6
What is planning?
6
An overview of the planning process
8
Integrating the planning process with other key organisational processes
9
Tips for writing effective plans
9
Stage 1: Preparation for Planning
13
1.1
Planning activity schedule
14
1.2
Board and chief executive roles in strategic planning
14
Stage 2: Development – The Strategic Plan
19
2.1
Reviewing organisational purpose and values
20
2.2
Assessing stakeholder expectations
22
2.3
Understanding the environment
23
2.4
Assessing organisational capability and performance
25
2.5
Identifying the strategic challenges
26
2.6
Determining strategic direction and outcomes
27
2.7
Establishing performance measures
30
2.8
Communicating the plan
33
2.9
Organisational alignment
34
Stage 3: Implementation – The Business Plan
37
3.1
Business plan structure
38
3.2
Business planning process
40
3.3
Financial planning
42
3.4
Business planning roles
43
Stage 4: Monitoring
47
Monitoring progress and performance
48
Appendix
53
Appendix 1: Strategic plan template
54
Appendix 2: Stakeholder surveys
55
Appendix 3: Reviewing your internal environment
57
Appendix 4: Annual business plan template
59
Glossary
62
1
2
Introduction
It’s not the strongest of
the species
who survive,
nor the most intellegent,
but the ones most responsive
to change.
Charles Darwin
4
STRATEGIC AND BUSINESS PLANNING
INTRODUCTION
Introduction
In this section:
The purpose of this guide
Linkage to other guidelines
What is planning?
An overview of the planning process
Integrating the planning process with other key organisational processes
Tips for writing effective plans
5
The purpose of this guide
This guide is designed to assist New Zealand sport and recreation organisations with
strategic and business planning. A core framework (or approach) is presented with
accompanying examples and explanations. It is not intended to be a ‘one size ﬁts
all’ approach. Personal experience and preferences may lead to variation from the
framework suggested here.
Before proceeding it is worthwhile recognising that a range of terminology is used
in planning literature. This guide uses the terminology introduced in the Governance
manual. A glossary of terms is contained in the Appendix.
Linkage to other guidelines
This guide should be used in conjunction with SPARC guidelines on governance (Nine
Steps to Effective Governance) and risk management (Guidelines for Risk Management
in Sport and Recreation, SNZ HB 8669:2004).
Nine Steps to Effective Governance provides an outline of the board’s role in setting
organisational direction, the strategic planning process, managing stakeholder relations
and strategic risk management.
Guidelines for Risk Management in Sport and Recreation provides a detailed process
for the identiﬁcation, assessment and management of organisational risk. These
components of risk management are closely aligned with key elements of the strategic
planning process. An effective risk management process can signiﬁcantly increase the
likelihood of successful implementation of an organisation’s vision.
What is planning?
“The strategist’s mind is very simply to challenge the prevailing
assumptions with a single question: ‘Why?’ And to put the same
question relentlessly to those responsible for the current way
of doing things until they are sick of it.”
– Kenichi Ohmae, The Mind of the Strategist:
The Art of Japanese Business
Sports organisations operate in a dynamic environment and face many pressing
challenges. A good planning approach will enable an organisation to better
understand those challenges, make strategic choices, establish a clear direction and
gain stakeholder support.
Planning is also the mechanism by which an organisation ensures alignment between
its desired direction and the resources and activity necessary to achieve the desired
strategic outcomes.
Poor planning puts an organisation at risk of making poor decisions and operating in a
reactive rather than proactive manner.
6
STRATEGIC AND BUSINESS PLANNING
INTRODUCTION
Planning is the process of determining what should
be achieved and how to achieve it.
Planning is:
•
A continual process. Planning does not end simply because a formal
planning period has ﬁnished. For example fresh insights or changes in the
external environment mean strategic assumptions, understandings and
responses must be constantly revisited. Also, the results of strategic activity
must be regularly assessed and lessons incorporated into new activity.
•
A mix of analysis and creative thought. Robust assessment and
discussion of the issues are blended with the uncovering of new ideas, new
approaches and new responses.
•
About engaging and aligning stakeholders. Capturing the hearts and
minds of staff, members and key inﬂuencers is a key outcome. Through
open consultation and subsequent communication, the support and
passion of these stakeholders can be fully engaged.
Planning in the sport and recreation sector is often characterised by:
•
Poor preparation. Limited analysis of the external environment, current
capability and stakeholder expectations.
•
Time pressure. The planning process is often squashed within a busy
operational environment. There can be very little time to properly examine
strategic possibilities.
•
Focus on ‘business as usual’. Plans often focus on doing what we’ve
always done but perhaps aiming to do them a little better. There can be
unwillingness to think ‘outside of the square’ and respond to the realities
of the external environment.
•
No supporting resource plan. A ‘stretch’ vision may be set but there is
often no resource plan for people, ﬁnance and infrastructure to support
the vision. Thus the feasibility of the plan is called into question.
Ensuring time for planning
It is often difﬁcult to devote sufﬁcient time to planning amidst the pressing demands
of day-to-day activity. This is not unique to sports organisations. However, it is essential
that planning is given high priority. Planning should be an inclusive, challenging,
collaborative, ﬂexible and continuous process and this requires time.
7
An overview of the planning process
“Ultimately strategy is about making choices.”
– Constantinos C Markides, All the Right Moves:
A Guide to Crafting Breakthrough Strategy
The planning process involves four primary stages:
•
Preparation: assigning roles, responsibilities and a timeframe for the
planning process
•
Development: identifying the strategic challenges, assessing the options,
and determining the overall direction and desired outcomes
•
Implementation: translating the strategic plan into a detailed annual
action plan
•
Monitoring: measuring performance and capturing the lessons
MONITORING
PREPARATION
IMPLEMENTATION
DEVELOPMENT
FIGURE 1: THE 4 – STAGE PLANNING PROCESS
Two plans are generated by this process, the strategic and annual business plans. The
relationship between the two is fundamental to effective planning, regardless of the
size of an organisation.
The strategic plan establishes what the organisation wants to achieve and the
business plan establishes how this will be achieved. Information from monitoring of
the business plan ﬂows back into the planning process.
While the planning process is presented in four distinct stages, in practice
these stages often overlap or even occur simultaneously. This should be
considered a natural result of planning in a dynamic environment.
8
STRATEGIC AND BUSINESS PLANNING
INTRODUCTION
Integrating the planning process with other key
organisational processes
Planning does not exist in isolation from other important organisational processes
such as risk management and people management. The diagram below summarises
those linkages.
Planning
•
Setting direction
•
Developing implementation plans
•
Monitoring and understanding results
•
Adjusting activity
Insights
&
Actions
KPIs
&
Results
Risk management
People management
•
Identifying risk
•
Setting goals
•
Assessing risk
•
•
Managing risk
Agreeing activity and development
plans
•
Assessing and rewarding performance
FIGURE 2: INTEGRATING THE PLANNING PROCESS WITH OTHER KEY ORGANISATIONAL PROCESSES
The processes of planning, risk management and people management inform and
guide each other. The role of governance is to provide strategic oversight and direction
to all three processes.
Tips for writing effective plans
When writing plans, keep in mind these simple tips:
•
Keep it simple – a variety of staff and stakeholders should be able to
easily follow and understand the plan, so ensure you use a clear logical
structure and simple language.
•
Keep it concise – your plan should be developed through a
comprehensive process but avoid overly detailed plans that are too long to
be practical.
•
Focus on results – plans are only effective if they result in action towards
the desired outcomes. Use the tips provided in this manual for setting
performance measures and monitoring and evaluation systems.
•
Be ﬂexible – planning is a dynamic process, so make sure your plans (and
more importantly your people!) are ﬂexible enough to make changes when
required. Build some ﬂexibility into your plans by leaving some excess time
and resources.
9
10
Stage 1
Preparation for Planning
None of us are as
smart as all of us
Japanese proverb
12
STRATEGIC AND BUSINESS PLANNING
STAGE 1: PREPARATION FOR PLANNING
1.0
Stage 1
Preparation for
Planning
In this section:
1.1
Planning activity schedule
1.2
Board and chief executive roles in strategic planning
13
1.0
1.0 Introduction
Preparation for planning essentially involves establishing activities, roles, responsibilities
and timeframes. Your organisation needs to commit the necessary time and people
resources and give the planning process due priority.
1.1 Planning activity schedule
Strategic plans are typically developed for periods of up to ﬁve years. While an
organisation should review its strategic plan annually, it may undertake a major review
less frequently or if the operating environment has signiﬁcantly changed.
A typical planning activity schedule for an organisation with a ﬁnancial year of
1 January–31 December is displayed below.
Month
Activity
June
1. Prepare work schedule for planning process
July/August
2. Review organisational purpose and values
3. Assess stakeholder expectations by consultation
4. Assess organisational capability and performance
5. Scan the environment for issues and opportunities
September
6. Identify the strategic challenges
7. Determine the strategic direction (vision and strategic outcomes)
8. Develop draft strategic plan
October
November
9. Finalise strategic plan
10. Communicate strategic plan to staff and stakeholders
11. Develop draft annual business plan, review
December
12. Communicate and sign off annual business plan
FIGURE 3: WORK PLAN FOR FULL STRATEGIC PLANNING PROCESS
The overall timeframe required depends on the organisation and the resources at its
disposal. A full strategic review may require four to six months, excluding time needed
to develop the annual business plan. The timeframe should allow for the appropriate
stakeholder consultation and should be aligned with the board schedule.
1.2 Board and chief executive roles in strategic
planning
“One of the board’s major roles is strategic governance, setting strategic
direction, helping plot the organisation’s path through an uncertain future,
and ensuring the organisation achieves what it should.”
– Nine Steps to Effective Governance, SPARC
The planning process should be a partnership between the board and the chief
executive. However the board must ultimately accept ownership of the process and
resulting plan. The board should also be able to monitor progress against the key
performance measures once the strategic plan is implemented.
In practice, the planning process is usually driven by the CE but the involvement of
the board is an essential part of their role. As a guide, the board, in addition to overall
ownership, should at least be responsible for developing the strategic direction from
the key issues.
14
STRATEGIC AND BUSINESS PLANNING
STAGE 1: PREPARATION FOR PLANNING
1.2
By working together on the planning process, boards and senior management can
ensure that the organisation’s strategies and people are closely aligned.
Expert tip: Involve external people
•
•
•
Effective planning requires organisations to challenge current
assumptions, thinking and operations.
It is a good idea to involve external people to generate and
encourage this critical thinking and rigorous discussion.
External people also add a valuable perspective from outside
your organisation.
15
16
Stage 2
Development –
The Strategic Plan
It’s not really where you
are today that counts.
It’s where you are
headed.
Arthur Lenehan
18
STRATEGIC AND BUSINESS PLANNING
STAGE 2: DEVELOPMENT – THE STRATEGIC PLAN
2.0
Stage 2
Development –
The Strategic Plan
In this section:
2.1
Reviewing organisational purpose and values
2.2
Assessing stakeholder expectations
2.3
Understanding the environment
2.4
Assessing organisational capability and performance
2.5
Identifying the strategic challenges
2.6
Determining strategic direction and outcomes
2.7
Establishing performance measures
2.8
Communicating the plan
2.9
Organisational alignment
19
2.1
2.0 Introduction
The development of a strategic plan can be a challenging and time-consuming process.
The guide outlines seven steps to enable an effective process:
•
Step 1: Reviewing organisational purpose and values
•
Step 2: Assessing stakeholder expectations
•
Step 3: Understanding the environment
•
Step 4: Assessing organisational capability
•
Step 5: Identifying the key strategic challenges
•
Step 6: Determining strategic direction
•
Step 7: Establishing outcomes and performance measures
A sample template for a strategic plan is provided in Appendix 1.
Following the development of your strategic plan you must:
•
communicate the plan to staff and stakeholders.
•
check for organisational alignment with the strategy.
These topics are covered at the end of this stage.
2.1 Reviewing organisational purpose and values
…” the fundamental distinguishing characteristic of the most enduring
and successful corporations is that they preserve a cherished core while
simultaneously stimulating progress.”
– James C Collins, Built to Last
The ‘cherished core’ of a sports organisation is its purpose and values – why the
organisation exists and how it wishes to be.
Purpose
The most powerful single statement a board can make describing
the organisation’s primary reason for being.
The purpose (or mission) statement refers to the core purpose of the organisation.
Examples from sports organisations include:
•
“Ensure that (sport) is a successful, viable and growing sport in
New Zealand”
•
“Lead and grow (sport) within New Zealand”
•
“More Northlanders active”
•
“…mission is to foster participation and success in sport and
active living…”
Although it is not common for the purpose of an organisation to change dramatically
over time, it should be reviewed occasionally to ensure it reﬂects the reality for your
organisation today and not a past reality.
20
STRATEGIC AND BUSINESS PLANNING
STAGE 2: DEVELOPMENT – THE STRATEGIC PLAN
2.1
A good purpose statement should:
•
describe the organisation’s reason for being
•
capture the culture of the organisation
•
be clear, concise and easy to read
•
maintain relevance in a changing environment
•
be speciﬁc enough to provide guidance to the organisation’s people.
When writing a purpose statement, consider the following:
•
Try adding or deleting a word to assess how concise the wording is.
•
Does the statement clearly separate the purpose of the organisation from
that of other organisations?
Some good starting questions to ask are:
•
What is our current purpose?
•
What is our reason for being?
•
If this organisation did not already exist why would we create it?
•
Who are we doing this for? Who should beneﬁt?
•
What’s important to us?
STEPS IN DEVELOPING A PURPOSE STATEMENT:
1.
Review foundation documents such as the constitution and existing
purpose statement
2.
Consult a core group of key stakeholders
3.
Review existing purpose in light of consultation
4.
Conﬁrm purpose statement
Values
Cherished beliefs and principles that are intended
to inspire effort and guide behaviour.
Closely associated with organisational purpose is a values statement. It is important to
understand that values are not what your organisation does, but how it does it. They
should reﬂect and foster the attitudes and behaviours that you intend employees and
volunteers to exhibit.
The Governance manual suggests that some good starting questions to ask are:
•
What are the essential values contained in our sport?
•
What is the ‘essence’, ethos or spirit of this organisation?
•
What do we stand for?
•
How do we want to interact with each other and the outside world?
•
What behaviours do we want to encourage?
•
What differentiates our organisation from others?
•
What truly draws people to participate with us?
There can be a big difference between ‘espoused’ values (what is said) and ‘lived
values’ (what is actually done in practice). Try to identify those that you really wish to
guide how you and your organisation behave. Whatever values you choose, ensure
they are monitored and aligned with the other organisational processes such as
performance management.
21
2.2
Examples of values from the sector include: teamwork, integrity, passion, innovation,
continuous improvement. Those organisations managing a sport should consider
whether the values represented by the sport can be reﬂected in the organisational
values. Values are likely to have more meaning and signiﬁcance if they are embedded
in your sport.
Together the values and purpose form the ongoing core of the organisation.
STEPS IN DEVELOPING A SET OF ORGANISATIONAL VALUES
1.
Identify core values contained in your sport (the sport itself) or
activities (RSTs)
–
2.
3.
Consult with staff and key members/ stakeholders
–
Ask them to identify behaviours they see that either enable or hold
the organisation back. These behaviours will indicate embedded
values e.g. control, status.
–
Questions can include: “What are people rewarded for?”, “What is
frowned upon?”, “Who do people look up to and why?”
Review existing values in light of consultation
–
4.
These can become your organisation’s values.
Determine the ‘desired’ values that will act as enablers and allow your
organisation to progress.
Conﬁrm a set of values for your organisation
–
Identify any gaps between ‘desired’ and ‘lived’ values
–
Strategy must address gaps.
2.2 Assessing stakeholder expectations
“Good governance demands that stakeholder interests are
identiﬁed and appropriate relationships are established.”
– Nine Steps to Effective Governance, SPARC
Stakeholder support is critical to the success of sports organisations. They provide
ﬁnancial, resource, political and moral support, all of which is critical to realising an
organisation’s vision.
Therefore organisation’s key stakeholders must be consulted during the planning
process. Actual stakeholders will vary depending on the type of organisation and
nature of its purpose. The table below lists typical stakeholders for Regional Sports
Trusts and National Sports Organisations.
22
Organisation
Stakeholder
National Sports
Organisations
•
Regions
•
Clubs
•
Staff
•
Coaches
•
Elite athletes
•
Participants
•
Sponsors
•
Volunteers
•
Funders
•
Government (SPARC)
•
Media
•
International sport bodies
STRATEGIC AND BUSINESS PLANNING
STAGE 2: DEVELOPMENT – THE STRATEGIC PLAN
Regional Sports Trusts
•
Territorial Authorities
•
DHBs and PHOs
•
Iwi
•
Regional sports organisations
•
Sponsors and funders such as charitable trusts
•
Media
•
SPARC
•
Schools
2.3
Before undertaking stakeholder consultation you need to decide on the:
•
Extent of consultation: Available resources and time will constrain the
amount of consultation you can undertake. Prioritise stakeholders based on
their level of inﬂuence as not all stakeholders are equal. Some have more
inﬂuence on the achievement of an organisation’s purpose than others.
Ensure those with a high priority are fully consulted.
•
Process of consultation: A range of mechanisms can be used for
consultation, including representative forums, one-to-one interviews, and
surveys.
The key is to get quality input. This means ensuring stakeholders
understand the nature of the consultation and have enough time to
contribute, and that feedback is provided following the consultation.
A template for stakeholder consultation is contained in Appendix 2.
An inclusive and collaborative approach is essential to help your sport organisation
build cooperation and buy-in amongst key stakeholders. This step can be timeconsuming but cannot be ignored.
2.3 Understanding the environment
“The essence of formulating competitive strategy is
relating an organisation to its environment.”
– Michael Porter, Competitive Strategy
Organisations do not exist in isolation but operate in a dynamic and constantly
changing environment. For example, changes in social attitudes, family patterns, and
ethnic makeup have had a major impact on participation and will continue to do so.
Most environmental factors cannot be controlled by the sports organisation, but can
be anticipated, understood and responded to. Ignoring the impact of these factors will
over time undermine the future of an organisation.
This phase can be challenging and is often done poorly. Understanding the challenges
presented by the environmental change requires a thorough assessment. The
assessment should also include competitive activity and the needs of the customers.
The general environment
External factors (excluding competition) inﬂuencing the success of the organisation can
be grouped into four areas using the PEST analysis:
•
Political environment: political priorities, proposed legislation
23
2.3
•
Economic environment: wealth, work type and economic trends
•
Social environment: lifestyle patterns and attitudes, demographics
•
Technological environment: communications, information management,
transport, entertainment
For each environment category the following questions should be asked:
•
What are the major changes currently occurring?
•
What impact are these changes having on our organisation?
•
What further changes are likely to occur in the future?
•
Which of these impacts represent threats to be managed or opportunities
to be exploited?
Obtaining such information can be challenging and time consuming. There are many
sources including the internet, similar organisations, universities, relevant management
magazines, advertising and media organisations.
Understanding customers and competitive activity
DEFINING YOUR MARKET
This requires you to consider what market your organisation is operating in and who
your competitors are. There may be different markets depending on the product
(or activity) you are considering. For example, the participant market for an activity may
be quite different from the viewing (or ‘audience’) market. This is particularly the case
for professional sport.
When considering participation in a sport or activity it must be remembered that
people have a choice as to how they spend their time. Understanding how they make
those decisions and the options they consider is a good way to understand what
beneﬁts your activity must deliver and to identify competitors.
Your target markets can be deﬁned in many ways, such as:
•
age
•
gender
•
income
•
behaviour
•
geographic location
•
attitudes
•
type of user
•
a mix of these
Typically sports organisations do not deﬁne their target markets this way or even
think in terms of target markets. However, good market deﬁnitions encourage an
organisation to be more focused and to think more strategically about how it can
grow participation.
CUSTOMER FOCUS
Ultimately the success or failure of any sport organisation depends on their ability to
attract and retain participants (customers). Successful organisations offer products
and services that add value and meet the needs of their target markets. This requires
a close understanding of needs and continual monitoring of how they change.
Some questions to ask that can help your organisation ‘think like a customer’ are:
24
•
What do your customers want from your organisation?
•
How satisﬁed are your customers with what you are currently providing?
•
What are the future requirements of your current and potential customers?
STRATEGIC AND BUSINESS PLANNING
STAGE 2: DEVELOPMENT – THE STRATEGIC PLAN
2.4
When assessing customers’ need there is a risk of acting on what your organisation
believes rather than on fact. It can be very beneﬁcial to use a targeted survey and/or
regular customer evaluation systems of some kind to collect quality data.
ASSESSING COMPETITIVE ACTIVITY
Having deﬁned the target markets, competitors need to be identiﬁed and their activity
and impact assessed. Some questions to ask are:
•
What other activities compete for your participants?
•
What competitors exist in the market?
•
What are their main strategies and how successful are they?
•
How is their ‘product’ (sport/activity) different from yours?
•
What services do they deliver?
•
Could our products and services be easily copied or substituted by a
competitor?
•
What are the key strengths and weaknesses of our competitors?
•
Are there any partnership or joint venture opportunities?
Due to New Zealand’s relatively small population base and the limited resources of
sport organisations, partnerships or joint venture opportunities to grow participation
and revenue should be given serious consideration.
2.4 Assessing organisational capability
and performance
This step aims to identify the internal strengths and weaknesses of your organisation.
Key questions to answer are:
•
What have we done well – what is enabling us to be successful?
•
What have we not done well – what is holding us back?
Core competencies
Core competencies are expertise or skills an organisation may possess that result in
performance superior to competitors. Examples include event management or
member services.
Organisational strengths (i.e. what we do well) can be described as core competencies.
These can be built on if valued by members, participants or funders.
Organisational weaknesses (i.e. what we don’t do well) either need to be developed (if
a required competency) or outsourced if someone else can do it better.
Core competencies can provide the building blocks for a new strategy.
Benchmarking
One way to assess your organisational competencies is benchmarking i.e. comparing
yourself against other highly regarded organisations. Benchmarking works well where
performance indicators can be relatively easily identiﬁed and measured. This process
often reveals unexpected opportunities for improvement.
Appendix 3 provides a framework for assessing the strengths
and weaknesses of an organisation.
25
2.5
Readiness for change
Is your organisation ready for change? Typical characteristics of a ‘change ready’
organisation include:
•
non-hierarchical organisation structure
•
accountability for results
•
high use of collaborative teams and projects
•
rewarding of performance and innovation.
The embedded culture of established organisations can often be a barrier to change.
How change-ready is your organisation?
2.5 Identifying the strategic challenges
Having undertaken a thorough review of organisational purpose, and the external and
internal environments, the next step is to determine the key strategic challenges
(or issues) facing your organisation.
A good tool for this is the SWOT analysis (Strengths, Weaknesses, Opportunities
and Threats).
Strengths
When you consider organisational performance and capability in relation to
other like organisations and competitors, what do you consider to be the
strengths of your organisation?
Weaknesses
When you consider organisational performance and capability in relation
to like organisations and competitors, what do you consider to be the
weaknesses of your organisation?
Opportunities
When you consider the trends and competitive activity within the wider
environment, what do you see as the possibilities for your organisation?
Threats
When you consider the trends and competitive activity within the wider
environment, what do you see as the threats to the future of your
organisation?
It is likely that many issues will have been identiﬁed and the challenge becomes to
identify truly strategic challenges and prioritise these to a manageable number. These
top priority issues need to be addressed if your organisation is to be successful in the
longer term.
Expert tip:
•
Start your SWOT analysis by collating the ﬁndings of your
external scan and internal assessment.
Key strategic challenges
Factors in the external or internal environment that
have the greatest potential to impact on the overall
purpose of the organisation.
The exact number of challenges identiﬁed will vary depending on the complexity of
the issues and the size and resources of the organisation. It is important to balance
the number of challenges to be addressed with the organisation’s ability to address
them. A typical small to medium-size sport organisation may focus on four to six
key challenges.
26
STRATEGIC AND BUSINESS PLANNING
STAGE 2: DEVELOPMENT – THE STRATEGIC PLAN
2.6
Low
Level of urgency
High
One method of identifying your key strategic challenges is to plot each issue on the
Impact: Urgency matrix below. Those issues with a high potential impact on your
organisation’s purpose and a high level of urgency are likely to be the key strategic
challenges to focus on.
High urgency, low impact
High urgency, high impact
= Medium priority issues
= High priority issues
Low urgency, low impact
Low urgency, high impact
= Low priority issues
= Medium priority issues
Low
Impact on purpose
High
Examples of strategic issues include:
•
declining participation
•
emergence of new activity directly competing for our target market
•
high staff turnover
•
over-reliance on gaming trust funding
•
inconsistent performance of elite athletes
•
general stakeholder dissatisfaction.
2.6 Determining strategic direction and outcomes
“I skate to where the puck is going to be, not where it has been.”
– Ice hockey legend Wayne Gretzky
With the analysis completed and strategic issues identiﬁed, it is now time to determine
the future direction of your organisation. This future is articulated by its vision
statement.
Generating possible future directions
It is likely that there will be more than one pathway your organisation could take for
the future. Some may have already emerged and been discussed informally. These
pathway options need to be identiﬁed and considered. This is a critical step in the
development of a sound strategy, but it is often overlooked.
Unfortunately, however, there are not endless options. Most organisations are
constrained by their purpose. For example, one sport cannot easily become another
sport – the stakeholders would rebel! For both National Sports Organisations and
Regional Sports Trusts there appear to some core aspects within which there is
strategic ﬂexibility.
27
2.6
National Sports Organisations
Regional Sports Trusts
•
Membership
•
Services
•
Services
•
Stakeholder relationships
•
Strategic relationships
•
Service delivery
•
Regional organisation
For each strategy category there is a range of options along a continuum between the
two alternatives outlined below.
National Sports Organisations – Strategic Options
Strategy categories
Strategic options (continuum)
Consolidate
Grow
Concentrate on retaining existing
members and participants
Actively attempt to increase
membership and participation
Services
Focus
Diversify
Concentrate on core services to
members and other participants
Expand the range of services offered to
members and other participants
Strategic relationships
Weak
Intense
Go it alone or without signiﬁcant
collaboration with other organisations
Partnerships central to strategy with a
high degree of collaboration with other
organisations
Regional organisation
Centralised
Decentralised
No or limited regional infrastructure,
services provided by national ofﬁce
Comprehensive regional infrastructure
and service delivery
Regional Sports Trusts – Strategic Options
Strategy categories
Strategic options (continuum)
Services
Focus
Diversify
Concentrate on core services to
participants and regional organisations
Expand the range of services offered to
participants and regional organisations
Service Delivery
In-house
Outsource
All programme delivery and services
provided by ofﬁce/ employees
All programme delivery and services are
contracted out to other providers
Stakeholder relationships
28
Weak
Intense
Go it alone or without signiﬁcant
collaboration with other organisations
Partnerships central to strategy with a
high degree of collaboration with other
organisations
STRATEGIC AND BUSINESS PLANNING
STAGE 2: DEVELOPMENT – THE STRATEGIC PLAN
2.6
Possible strategic directions can be created by bringing together various strategic
options. This stage is akin to creating alternative future scenarios for the organisation.
Certain strategic option combinations tend to ﬁt together e.g. growing membership
and diversifying services; creating intense stakeholder relationships and out-sourcing
service delivery. Other combinations are not a natural ﬁt e.g. diversifying services and
consolidating membership.
Ultimately, strategic choice involves trade-offs and decisions – your organisation
can’t be all things to all people. The strategic choices made at this stage have major
ramiﬁcations for resource allocation and the operations of your organisation following
implementation.
Your organisation should develop at least two alternative future scenarios. This
provides an opportunity to evaluate any preferred direction by comparison with
another alternative.
For example, a sport may consider the following two scenarios:
Scenario 1 – Grow membership by diversifying services with intense
partnerships
Scenario 2 – Grow membership by focusing on core services and
decentralised delivery
Possible strategic directions can be evaluated and compared by considering the
following questions:
•
Would our key stakeholders support this direction?
•
Could our organisation effectively deliver this direction?
•
Would this direction achieve our purpose?
•
Would this direction address the key issues faced?
•
Would this direction address any major gaps identiﬁed in the organisation?
•
Would this direction build on our strengths to take advantage of
opportunities?
•
Would this direction help overcome weaknesses and minimise threats to
the organisation?
•
Would this direction provide a competitive advantage for the organisation?
This last question regarding competitive advantage is an important one to ask. A
competitive advantage capitalises on core competencies and/or opportunities to
create an edge over competitors that leads to a superior position in the market. If your
organisation is able to achieve a competitive advantage that is sustainable over time, it
can create a strong position for long-term success.
Once you have determined a strategic direction you need to develop a vision statement
to express the desired outcome of this direction.
Vision
An inspirational vision of an ideal future
Vision statements are typically short statements that look forward beyond the current
timeframe to describe an ideal future state. They may be supplemented with a more
detailed description of this future state (sometimes call a ‘vivid description’).
The Governance manual suggests a good starting question is: “Given where we are
now, where do we want to get to?”
29
2.7
A good vision should:
•
provide future direction
•
express a beneﬁt to key stakeholders
•
be achievable
•
motivate and inspire people towards a common goal.
Examples include:
•
“By 2012 to have 150,000 participants”
•
”Everyone inspired to be active and healthy for life”
Having now established a strategic direction and vision, the next stage is to deﬁne the
strategic outcomes to be achieved and performance measures to be used.
Strategic outcomes
The organisation’s high-level, longer-term deliverables.
This is a key step in translating strategic intent into more tangible results. These
outcomes should clearly support the vision and address the key strategic challenges.
The preferred strategic options determined previously can signal desired outcomes.
Examples of strategic outcomes include:
•
ﬁnancially sustainable organisation
•
world-class high performance programme
•
more people participating, more often.
2.7 Establishing performance measures
Performance measures need to be set for each strategic outcome. These indicate the
scale of change desired and enable progress to be monitored and success measured.
Performance measures are often referred to as key performance indicators (KPIs).
KPIs should be used at all levels within the organisation for monitoring short-and longterm performance. All KPIs used should be ultimately linked to the outcomes deﬁned in
the strategic plan.
Strategic Performance Measures
(4 years)
Operational Performance
Measures (1 year or less)
30
STRATEGIC AND BUSINESS PLANNING
STAGE 2: DEVELOPMENT – THE STRATEGIC PLAN
2.7
Some examples of strategic performance measures (KPIs) are outlined in the
table below:
Strategic Outcome
Financially sustainable organisation
World-class high performance programme
More people playing, more often
Strategic Performance Measure
(KPI)
•
$2 million
•
25% of revenue from sponsorship
•
Three medals at the 2008 Olympics
•
95% compliance with good practice
•
10% increase in membership
•
95% compliance with good practice
Each strategic outcome may require more than one KPI. It is often desirable to include
a quantitative KPI, such as membership numbers or medal targets, and a qualitative
KPI, such as satisfaction or benchmark score.
In the example above for the strategic outcome ‘World class high performance
programme’ the quantitative KPI is ‘Three medals at the 2008 Olympics’, being a clear
measure of the desired end result. The qualitative KPI is ‘95% compliance with good
practice’, being a measure of capability and/or systems. Together the two KPI enable a
balanced measurement of performance.
To ensure effective KPIs, consider developing them based on the SMART approach to
setting targets. SMART is an acronym for:
Speciﬁc
Clear and concise to describe exactly what will be achieved
Measurable
Enables realistic monitoring of achievement
Achievable
Realistic, the organisation is capable of reaching targets
Relevant
Related to the vision, a true indicator of desired change
Time bound
Deadline to achieve by required date
Strategic initiatives
The actions required to enable each strategic outcome to be achieved.
Having determined the strategic outcomes and performance measures, the next step
is to determine the high level strategic initiatives or at least agreeing an approach to
determining these initiatives.
Often a strategic outcome will require several initiatives to be undertaken over the
period of the plan. It is also possible that at the time of developing the strategic plan,
the right initiatives are not known and analysis is required – this can be signalled in
the plan.
31
2.7
Examples of the linkage between strategic outcomes and initiatives include:
Strategic Outcome
Performance Measure
(KPI)
Financially sustainable
organisation
World-class high performance
programme
More people playing, more
often
Strategic Initiative
•
$2 million
•
•
25% of revenue from
sponsorship
Identify opportunities for
charitable trust funding
•
Enhance and grow
sponsorship portfolio
•
Increase revenue from
membership
•
Identify good practice
organisations and
benchmark current practice
•
Develop and implement
plan to address any gaps
•
Develop new promotional
programme
•
Introduce new loyalty
programme to encourage
retention
•
Three medals at the 2008
Olympics
•
95% compliance with good
practice
•
10% increase in
participation amongst
youth
Strategic initiatives identiﬁed are then developed in more detail within the annual
business plan. This is Stage 3 of the planning process.
VISION
STRATEGIC
OUTCOME
STRATEGIC
OUTCOME
STRATEGIC
OUTCOME
STRATEGIC
OUTCOME
STRATEGIC
OUTCOME
KPIs
KPIs
KPIs
KPIs
KPIs
STRATEGIC
INITIATIVES
STRATEGIC
INITIATIVES
STRATEGIC
INITIATIVES
STRATEGIC
INITIATIVES
STRATEGIC
INITIATIVES
1.
1.
1.
1.
1.
2.
2.
2.
2.
2.
3.
3.
3.
3.
3.
PURPOSE AND VALUES
FIGURE 5: FLOW CHART OF A STRATEGIC PLAN
Additional information
Further information that can be included in the strategic plan includes:
•
organisation staff structure
•
ﬁnancial plans.
These are usually included as appendix items.
32
STRATEGIC AND BUSINESS PLANNING
STAGE 2: DEVELOPMENT – THE STRATEGIC PLAN
2.9
The Balanced Scorecard: A method for communicating and
monitoring organisational performance
The strategic performance measures can be presented within a so-called ‘Balanced
Scorecard’. This has become a popular form of communicating and monitoring
performance targets.
It is an approach that ensures an organisation focuses on more than just ﬁnancial
measures. The ‘textbook’ scorecard complements ﬁnancial measures with three sets of
operational measures, or perspectives; customer (member or stakeholder) satisfaction,
internal processes, and the organisation’s ability to learn and improve.
Collectively these four perspectives can provide answers to four key questions:
•
How do our members and participants see us?
•
What do we need to do to excel?
•
How strong is our ﬁnancial position?
•
How can we continue to improve and add value?
This balanced set of performance measures can be communicated in a visual
‘scorecard’ format, as in the example below. For each perspective goals and
performance measures can be set.
Members/Participants
• Number
Financial
• Total revenue
•
Satisfaction
•
Diversiﬁcation
•
Level of involvement
•
Net result
•
Retained earnings
Internal Capability
• Staff capability and development
Innovation
• Service quality
•
Staff retention and satisfaction
•
New products and services
•
Core processes
•
New developments to enhance
organisational performance
A number of sports organisations have developed their own variations on this theme.
2.8 Communicating the plan
Once signed off, considerable effort needs to be applied to communicating the plan
to staff and stakeholders. This is an important part of getting buy-in, energising the
organisation and preparing it for change.
Presenting the plan to a range of audiences requires thought as to the content and
visual appearance of the plan. While the board and staff will need to have the full
version of the plan, a summary presented in a visually appealing way is suitable
for many stakeholders. The printed plan should be professionally presented with
images and colour. For communicating the plan to groups a professional PowerPoint
presentation should be used.
Some organisations summarise the key elements of their plan (purpose, vision, values,
strategic outcomes and performance measures) onto a single page (typically an A3
sheet). This captures the essence of the plan visually on a page and can be valuable as
a quick reference summary.
33
2.9
2.9 Organisational alignment
An excellent strategy on paper is worthless unless the organisation is ready to
effectively support and implement it. The strategy must be supported and reinforced by
an organisation’s structure, systems and culture.
The importance of alignment cannot be overemphasised. Below is a handy checklist
for asking the critical question, “Now that we have developed our strategy, is our
organisation capable and ready to support it?”
For each “No” answer you will need to identify the issue(s) and what needs to be done
to correct them. (Sometimes this may already be addressed in the strategic plan.)
Strategy Alignment Checklist
Leadership
Is the Board supportive of the strategy?
Is Board reporting linked to the strategy?
Do we have capable leaders within the organisation?
Structure
Is our organisation structured into units that effectively support
and deliver the strategy?
People
Do we have the people with the right skills needed to deliver our
strategy?
Do our people support the strategy?
Stakeholder
management
Do we have effective communications with stakeholders?
Incentives
Is our remuneration and rewards system aligned with the
strategy?
How are we communicating the new strategy to stakeholders?
Are individual performance goals aligned with the strategy?
Culture
Does our existing organisational culture (actual not espoused)
support our strategy?
Resources
Are our resources aligned to the strategy?
Do we have enough resources (people, ﬁnancial, time, other
resources)?
34
Support
systems and
processes
Are our systems facilitating the effective delivery of the strategy?
Risk
management
Have we identiﬁed the major risks associated with the strategy
and planned to respond and prepare accordingly?
Do we have adequate systems in place for monitoring the
strategy?
Yes
No
Stage 3
Implementation –
The Business Plan
You’ve got to think about
the
while
big things
you’re doing the small
things, so that the small things
go in the
right direction.
Alvin Tofﬂer
STRATEGIC AND BUSINESS PLANNING
STAGE 3: IMPLEMENTATION – THE BUSINESS PLAN
3.0
Stage 3
Implementation –
The Business Plan
In this section:
3.1
Business plan structure
3.2
Business planning process
3.3
Financial planning
3.4
Business planning roles
37
3.1
3.0 Introduction
“The strategy by itself is not often the cause (of failure).
Strategies most often fail because they aren’t executed well.”
L. Bossidy & R. Charan, Execution
Following completion of the strategic plan, the challenge is now to translate strategic
direction into actions that produce results. A brilliant strategic plan is worthless without
effective implementation. The annual business planning process is a key mechanism for
ensuring alignment and focus.
All parts of the organisation will contribute in some way to achieving the desired
strategic outcomes. Prioritising activity and allocating resources, such as time and
money, can be a challenging task. This is particularly so for organisations with very
limited resources.
Critical to the planning process is the ability of the chief executive and senior staff to
understand their contribution to those outcomes, to identify where alignment between
work units is critical and to manage the inevitable compromises between what ‘we
would like to do’ and what resources realistically allow.
It is important that the various business units within an organisation do not develop
their individual plans in isolation. They need to understand how they can contribute
to achievement of all the desired strategic outcomes and how they need to work with
each other to do so.
This section covers business plan structure, process and roles. A business plan
template can be found in the Appendix. This can be modiﬁed to suit the needs of
the organisation.
3.1 Business plan structure
“The business plan details the ‘means’ to achieve
the ‘ends’ deﬁned by the strategic plan.”
While the business plan document itself can be structured a number of ways, the plan
should contain:
•
clear linkages between the desired strategic outcomes and the planned
initiatives
•
performance measures that enable progress to be monitored
•
deﬁned costs, responsibilities and timeframes.
A sample business plan template is provided in Appendix 3. It contains two
main components:
1.
2.
A summary page that includes:
•
a summary of strategic outcomes from the strategic plan
•
organisational KPIs for the year
•
key strategic initiatives for the organisation.
An activity plan for each business unit:
•
38
Strategic initiatives: KPIs and major initiatives to be undertaken
STRATEGIC AND BUSINESS PLANNING
STAGE 3: IMPLEMENTATION – THE BUSINESS PLAN
•
3.1
‘Business as usual’ activity: KPIs for each ‘key results area’ and a
summary of activity
Organisational activity
Activity undertaken by the organisation can be separated into two types: that which
meets the core purpose of the organisation and that which enables strategic change to
be achieved.
1.
Strategic initiatives (activity)
Achieving a strategic outcome will often be the cumulative result of a number of
key change activities undertaken over a period of time. These can be called strategic
initiatives and are the key actions management intends to undertake to achieve the
desired change.
It is essential that these activities are well understood and closely managed by the
organisation and the Board. Often they can be the initiatives that get forgotten,
pushed aside or are completed late or poorly under the pressure of day-to-day activity.
2.
‘Business as usual’ activity
‘Business as usual’ activities are those normally undertaken by a business unit on a
year-to-year basis. Examples include competition management, programme delivery,
and athlete development. This is important activity which enables the organisation
to fulﬁl its core purpose; however, such activity will not necessarily result in the
organisation’s goals being achieved.
Separating ‘strategic initiatives’ and ‘business as usual’ activity can be beneﬁcial in
encouraging senior management and the board to focus resources, discussion and
monitoring on these activities. The business plan template separates these strategic
initiatives from the key results areas (KRAs) of the organisation. For example, KRA
may include high performance, sport development, member services, ﬁnance and
administration. In the planning template, ‘business as usual’ activity is captured
under key results areas (KRAs). For each KRA, KPIs should be deﬁned against which
performance can be measured.
Expert tip:
•
•
The biggest mistake made when planning is trying to do too
much. Often this results in nothing being effectively achieved.
A key part of effective planning is the ability to know how
much can be done with the resources available, and to
prioritise by the impact on strategic outcomes.
Business as usual activity should be reviewed to ensure it is adding value and
contributing to achievement of the organisation’s purpose and vision.
39
3.2
3.2 Business planning process
The business plan must address the strategic outcomes deﬁned in the strategic plan.
There are four steps to ensuring this occurs:
Step 1:
Conﬁrm key performance indicators (KPIs) for the year.
Step 2:
Determine the strategic initiatives for each business unit.
Step 3:
Plan for ‘business as usual’ activities.
Step 4:
Consolidate, with review by the CEO and approval by the Board.
Step 1:
Conﬁrm key performance indicators (KPIs) for the year
The strategic plan describes the strategic outcomes to be achieved over a longer period
and the associated performance measures (KPIs). As the timeframe for achieving
the performance measures is usually longer than one year, annual KPIs must be
established. Below is an example using the strategic outcomes from the Stage 2.
Strategic Outcome
Strategic PLAN
Annual Business Plan
Key Performance Indicator
Key Performance Indicator
4 Years
4 Years
Year 1
Financially sustainable
organisation
•
$2 Million total revenue
•
$1 Million total revenue
•
25% of revenue from
sponsorship
•
15% revenue from
sponsorship
World-class high performance
programme
•
3 gold medals at the 2008
Olympics
•
•
100% compliance with
good practice
Development gaps in
programme understood
and documented
•
20% increase in baseline
membership
•
Benchmark against good
practice completed
•
95% compliance with good
practice
•
Membership growth
strategy implemented
More people playing,
more often
Annual KPIs measure progress towards the strategic KPIs. In the example above, the
annual KPIs for the strategic outcome ‘Financially sustainable organisation’ could be
as follows:
40
Year 1
Year 2
Year 3
Year 4
$1M
$1.25M
$1.5M
$2M
STRATEGIC AND BUSINESS PLANNING
STAGE 3: IMPLEMENTATION – THE BUSINESS PLAN
Step 2:
3.2
Determine strategic initiatives
Once the annual KPIs have been set, business unit managers can determine the
strategic initiatives required to achieve these performance measures. This step should
be undertaken in consultation with staff and appropriate advisory groups.
Determining the strategic initiatives can be very challenging. Consulting widely to ﬁnd
advice from other similar organisations and experts will provide some guidance.
Action plans do not need to contain all the detailed activity required to accomplish the
initiatives. They should identify just the key tasks or projects to be undertaken.
Continuing the previous example, some possible strategic initiatives for one of the
strategic outcomes in the example are identiﬁed.
Strategic Outcome
Annual Business Plan
Strategic Initiatives
Key Performance Indicator
4 Years
1 Year
1 Year
Financially sustainable
organisation
•
$1 Million total revenue
•
•
15% revenue from
sponsorship
Revenue from current
sponsorship structure and
pricing
•
Raise membership fees by
10%
•
Identify and target funders not
currently accessed
Worldclass high
performance programme
•
3 gold medals at the 2008
Olympics
•
Determine benchmarking
partners
•
100% compliance with good
practice
•
Complete full assessment
capability against
benchmarking partners
To complete the draft business plan for each strategic initiative the business unit
manager must:
•
establish budgeted costs
•
allocate who is responsible
•
set timeframes for the start, ﬁnish and any key milestones
Continuing the previous example, the action plan for the strategic outcome ‘Financially
Sustainable Organisation’ is completed below;
Strategic
Outcome
KPI
Financially
sustainable
organisation
•
•
Strategic Initiatives
Cost
Who
Timeframe
$1 Million total
revenue
•
Revenue
from current
sponsorship
structure and
pricing
$10K
Marketing
Manager
1 May
15% revenue
from sponsorship
•
Raise membership
fees by 10%
1 June
•
Identify and
target funders not
currently accessed
1 April
41
3.3
Step 3:
‘Business as usual’ activities
To enable focus on the key strategic initiatives and differentiate ‘business as usual’
activities, it is useful to separate planning for strategic initiatives and business as usual
activities. As discussed, these activities can be captured under ‘Key Result Areas’
(KRAs). For each key result area, the business unit manager must follow a similar
process as above, namely:
•
set KPIs for each Key Results Area
•
determine key actions required
•
establish budgeted costs
•
allocate who is responsible
•
set timeframes for the start, ﬁnish and any key milestones.
A sample ‘business as usual’ action plan for the key result area of human resource
management is completed below:
Key
Results
Area
KPI
Actions
Cost
Responsibility
Timeframe
Human
Resources
95%
compliance
with good
practice
Benchmark HR
practices and
policies against good
practice
$5,000
CEO
June 1
80% score
in staff
satisfaction
survey
Contract HR
expertise to
implement good
practice
$10,000
CEO & Consultant
August 1
Conduct annual
staff survey
$2,000
CEO
December 1
Step 4:
Review by the CEO and approval by the Board
The draft business unit plans are now consolidated and reviewed by the chief
executive. Real value is added by reviewing for quality, feasibility and alignment. In
particular, ask the question, “If we complete all this activity will we really get the
results we are looking for?”
The consolidated draft plan is presented to the board for review and sign-off. There
may be a number of iterations before the plan is ﬁnally signed off.
The plan is then communicated widely to staff and stakeholders as appropriate.
3.3 Financial planning
A ﬁnancial plan, including the budget and cash ﬂow forecast, needs to be developed
and included in the business plan.
The annual operating budget forecasts the total income and expenditure for the
organisation. Total expenditure should represent the consolidated costs from the unit
business plans.
The cash ﬂow forecast includes all incoming and outgoing cash, by month, for the full
business plan month period. It should a have running accumulated cash position that
highlights risk periods for overall cash position.
42
STRATEGIC AND BUSINESS PLANNING
STAGE 3: IMPLEMENTATION – THE BUSINESS PLAN
3.4
3.4 Business planning roles
Board
Chief Executive
Business unit
managers
Finance Manager
The main roles of the board in the business planning process are to:
•
Setting strategic priorities and targets within the strategic plan
•
Review and sign-off of the annual business plan
Chief executive responsibilities normally include:
•
Managing the overall business planning process
•
Giving guidance to business unit managers
•
Drafting and reviewing the consolidated plan
•
Negotiating with managers and board to get sign-off
•
Ensuring that communication with staff and other stakeholders occurs.
Business unit managers are normally responsible for:
•
Engaging in discussion with other managers, advisory groups and the chief
executive to understand the business plan priorities
•
Developing operational plans for their units that align with strategic
outcomes
•
Delivering their draft plans to the chief executive within planning
timeframes
•
Assisting the chief executive in the review of the draft plan.
The ﬁnance manager (or staff member with ﬁnancial responsibility) is
responsible for:
•
Providing ﬁnancial information and advice to business units and the chief
executive
•
Developing a consolidated draft budget and cash ﬂow for the period of
the business plan.
43
Stage 4
Monitoring
Even if you are on the right track,
you’ll get
run over
if you just sit there.
Will Rogers
46
STRATEGIC AND BUSINESS PLANNING
STAGE 4: MONITORING
4.0
Stage 4
Monitoring
In this section:
Monitoring progress and performance
47
4.0
Monitoring Progress annd Performance
“Close monitoring of progress enables the impact of initiatives to be
properly understood, and when necessary the plan to be modiﬁed.”
The monitoring stage is an ongoing process and involves continually asking the
questions, “Are our initiatives giving us the outcomes we seek?” and “Do we need to
make any changes to stay on course?”
At a practical level this stage involves:
1.
Reporting progress against strategic KPIs on a regular basis
2.
Understanding the reasons for performance achieved
3.
Adjusting activity based on the assessment
This stage can be time-consuming and, depending on the ease of data collection,
sometimes expensive. There can also be underlying resistance if the work environment
does not support open discussion on performance. Monitoring and evaluation are,
however, critical to successfully achieving your objectives and incorporating change in a
timely manner.
Monitoring requires formal reporting and the systematic collection of data. Ideally
it should be linked to board reporting requirements. It is important to collect only
relevant information that will enable proper assessment of performance. Information
to be collected should be prioritised according to its importance and the resources
available to the organisations.
It is important also to ensure clarity about how information is collected and who is
responsible for collecting it, and that they understand why the information is being
collected. Monitoring should be a normal part of organisation activity and included in
job descriptions and budgets.
Some forms of monitoring are:
•
observation
•
asking questions/ surveys
•
using records
•
take-up of services
•
using proﬁle data on participants
•
feedback.
Collecting relevant information is the ﬁrst step. What really matters is then using this
information to make appropriate changes and improvements.
Effective monitoring is essential for the accurate evaluation of strategy that occurs
during the next strategic planning process.
Applying learning
In addition to tracking and measuring performance, monitoring enables organisational
development and accountability and assists with reporting.
Monitoring enables you to assess how well you are doing by asking questions such as:
48
•
What is working?
•
What isn’t working?
•
What could work better?
STRATEGIC AND BUSINESS PLANNING
STAGE 4: MONITORING
4.0
Effective monitoring will increase your understanding of your business, members
and environment. This provides an opportunity to apply this learning by making
adjustments and changes to further improve your organisation’s performance and
effectiveness. This learning can be applied at the next planning cycle and also when
required, during the existing plan timeframes, to help ensure the desired outcomes
are still achievable. When this process highlights major change or issues it may lead
to a rethinking of the strategic direction of the organisation. By following this cyclical
process your organisation can develop into a learning organisation.
Reporting
The information gathered in the monitoring stage should form the basis for
organisation reporting to the board. The reporting format should enable the board to
monitor progress against the goals set in the strategic and business plans.
A template for reporting against the strategic plan is provided below. Examples from
previous sections are used to provide an example board update for 4th quarter, Year 2
of a four-year strategic plan.
BOARD REPORTING TEMPLATE
Progress against strategic KPIs
Board Update: 4th Quarter (Year end) Year 2
Strategic
Outcome
Key
Performance
Indicator
Financial
sustainable
organisation
Revenue of $2
Million by 2008
Year 1 KPI
$1M
Progress vs KPI
25% of
revenue from
sponsorship
10% increase in
membership by
2008
12.5%
Progress vs KPI
$1.25M
Year 4 KPI
$1.5M
$2M
15%
20%
25%
5% increase
on base
10% increase
on base
80%
95%
X
Baseline
established
Progress vs KPI
95%
compliance with
good practice
Year 3 KPI
X
Progress vs KPI
More people
playing more
often
Year 2 KPI
2% increase
on base
X
Benchmark
established
60%
X
In the table X indicates expected progress and the coloured bar indicates actual
progress towards each KPI. In this example the reporting has indicated a possible
issue with progress on the KPI ‘Revenue of $2M by 2008’ (as indicated by the darker
shading).
49
Appendix
Leaders keep their eyes on the
horizon not just
the bottom line.
Warren Bennis
STRATEGIC AND BUSINESS PLANNING
APPENDIX
Appendix
In this section:
Appendix 1: Strategic plan template
Appendix 2: Stakeholder surveys
Appendix 3: Reviewing your internal environment
Appendix 4: Annual business plan template
Glossary
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Appendix 1: Strategic plan template
This template is a sample structure for a strategic plan. It can be modiﬁed to meet the
needs of your organisation.
Strategic plan
1.0 Organisational purpose and values
2.0 Key strategic challenges
3.0 Vision
4.0 Strategic outcomes (see table below)
4.1. Key performance indicators
4.2. Key strategic initiatives
5.0 Appendix
5.1. Financial planning summary
5.2. Organisation structure
4. STRATEGIC OUTCOMES
Each strategic outcome should have a key performance indicator(s) (KPI) and a number
of strategic initiatives required to achieve the outcome.
Strategic Outcomes (1)
(1)
(2)
(3)
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Key Performance Indicators (2) Key Strategic Initiatives (3)
List the Strategic Outcomes
Determine the Key Performance Indicator(s) for this outcome
Determine the Key Strategic Initiatives required to achieve the Strategic Outcome
STRATEGIC AND BUSINESS PLANNING
APPENDIX
Appendix 2: Stakeholder surveys
Example 1: RST
RST stakeholder survey (face to face)
1. What do you know about Sport X?
1 … 2 … 3 … 4 … 5 … 6 … 7…. 8 …9
Nothing
Lots
a) Do you know what they do? How they are funded? How do you know?
b) Have you read their annual report?
Yes/No
c) Have you visited their website?
Yes/No
d) Would you like to know more?
Yes/No
2. Do you think Sport X is doing the right things to promote active, healthy lifestyles?
1 … 2 … 3 … 4 … 5 … 6 … 7…. 8 …9
Never
All the time
a) What do you think the roles/responsibilities of Sport X are?
b) Are there gaps between what they are currently doing and should be doing?
3. Have you worked with Sport X?
Yes/No
a) Are you currently working with Sport X?
Yes/No
b) Outline purpose and frequency
c) Have you found Sport Southland effective/useful in that joint project?
1 … 2 … 3 … 4 … 5 … 6 … 7…. 8 …9
Totally ineffective
Very effective
d) Why/Why not? Any speciﬁc examples?
4. In general, how effective do you believe Sport X is in promoting active,
healthy lifestyles?
1 … 2 … 3 … 4 … 5 … 6 … 7…. 8 …9
Totally ineffective
Very effective
Again, in general, how effective do you believe Sport X is in supporting organised sport?
1 … 2 … 3 … 4 … 5 … 6 … 7…. 8 …9
Totally ineffective
Very effective
a) What are its strengths?
b) What are its weaknesses?
5. Looking to the future
a) What support/skills/expertise will you be looking for from Sport X?
b) What overall priorities do you think Sport X should have?
6. How would you rank your current relationship with Sport X?
1 … 2 … 3 … 4 … 5 … 6 … 7…. 8 …9
Totally dysfunctional
Very close
a) What aspects of the relationship do you particularly like?
b) How could that relationship be enhanced?
c) Are there key times when you’d like to be consulted?
d) What information do you want from Sport X? How frequently? In what form?
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Example 2: NSO
NSO stakeholder survey (face to face)
1. How well would you rate your understanding of what SportNZ does?
1 … 2 … 3 … 4 … 5 … 6 … 7…. 8 …9
Have no idea
a) Have you read their annual report?
b) Have you visited their website?
c) Would you like to know more?
Very well
Yes/No
Yes/No
Yes/No
2. Do you think SportNZ is doing the right things to develop the sport?
1 … 2 … 3 … 4 … 5 … 6 … 7…. 8 …9
Not at all
Deﬁnitely on the right track
a) What do you think the roles/responsibilities of SportNZ are?
b) Are there gaps between what they are currently doing and should be doing?
3. Looking to the future
a) What support/skills/expertise do you expect from SportNZ?
b) What overall priorities do you think Sport NZ should have?
4. How would you rank your current relationship with SportNZ?
1 … 2 … 3 … 4 … 5 … 6 … 7…. 8 …9
Totally dysfunctional
Very close
a) What aspects of the relationship do you particularly like?
b) How could that relationship be enhanced?
c) Are there key times when you’d like to be consulted?
d) What information do you want from SportNZ? How frequently? In what form?
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STRATEGIC AND BUSINESS PLANNING
APPENDIX
Appendix 3: Reviewing your internal environment
Some questions to facilitate this review of your organisation
Stakeholders
Are stakeholders satisﬁed with your performance? What areas do they
perceive as strengths and weaknesses?
What threats and opportunities do they see for us?
What are their expectations for us over the next 3-5 years?
Leadership &
Governance
Do we have a clear understanding of our purpose? Is our current purpose
still relevant or does it need to change?
Do we have a good understanding of the future?
Does the board operate effectively? Do we have capable people on the
board? Does our Constitution limit our ability to govern effectively?
Are our regions ‘on-board’ and working in the same direction?
Are we a proactive or reactive organisation? Why?
Structure & Staff
Do we have the right organisational structure and skill mix to deliver on
our purpose and vision?
Is our organisation performing? What are the weaknesses?
Does the organisational structure hinder or facilitate a free ﬂow of
information?
How well do different parts of the organisation cooperate and coordinate
with each other?
Are our staff satisﬁed? Is turnover high?
Do our staff management practices get the best out of our people? Are
our performance management and remuneration processes effective and
encouraging desired staff behaviour? Do we have good training and
development plans for staff?
Systems
Do our internal systems meet the needs of the organisation? What are
the gaps?
Do we have the ability to capture data and provide good management
information and reporting?
Do we comply with legal requirements – ﬁnancial, health & safety…
Finance/Revenue
Is our revenue sufﬁcient? How much does it need to be?
Do we have adequate reserves?
Are we too dependent on one or two sources of revenue? What are our
revenue risks?
What are the revenue growth opportunities? Do we have emerging
revenues from new products/services?
Are we resourced adequately to take advantage of revenue-generating
opportunities?
Marketing
Do we have deﬁned, and well-understood, participant and consumer
segments (consumer – TV audience, purchasers of merchandise,
purchasers of services)?
Do we have marketable properties? Are they in decline, development or
maintenance modes? What do our target markets want?
Are we regularly developing new products and services?
Is our promotional activity effective? Are our target markets aware of our
sport, its beneﬁts and how to participate?
Do we manage our sponsors well? Are they satisﬁed?
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Communications
Do we communicate well with staff, members and stakeholders?
Do we know what we want to communicate and have clear strategies for
communicating those messages?
Participants/ Member
services
(full members and
casual participants)
Do we know who our members and participants (including ‘pay for play’)
are? Do we understand their needs and expectations? Are we monitoring
these?
Are member/participant numbers static, growing or declining? How does
this compare with other sports and activities?
Are sub-groups (such as teenage boys) within the overall membership/
participation static, growing or declining?
Do we have accurate records of our participants? Do we know who
participates in our sport other than our members?
Are our members satisﬁed with the services and beneﬁts they receive?
Volunteers (Coaches,
ofﬁcials)
Do we have enough skilled volunteers to administer, coach and referee
our sport? Are we attracting sufﬁcient new volunteers?
Are our processes for volunteer recruitment and development effective
and resourced properly?
Regional
Development
Are our regional associations supportive of our strategic directions?
Are there barriers at region and club level?
Are they capable of developing the sport within their regions? Are there
obvious weaknesses?
If we have regional development ofﬁcers, are they effective? How do
we know?
Is the level of service delivery at a regional level of a high standard?
Elite Performance
Are we achieving our objectives for our elite members?
Are our processes and programmes for talent identiﬁcation, development
and retention effective?
Do we understand and monitor the needs of our elite athletes, coaches
and ofﬁcials?
Events
Are our events well run? Are participants satisﬁed?
Are levels of attendance static, growing or declining?
What opportunities exist to develop new events to tap new markets?
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(1)
(2)
(3)
(4)
Strategic Key Performance Indicators
(KPIs) (2)
Annual Key Performace Indicators
(KPIs) (3)
List the Strategic Outcomes from strategic plan
For each outcome list the strategic KPIs from the strategic plan
For each outcome list the KPIs to be achieved in the business plan period
For each outcome list Key Strategic Initiatives to be undertaken in the business plan period
Strategic Outcomes (1)
1. PLAN SUMMARY
Business plan
Key Strategic Initiatives
for the year (4)
STRATEGIC AND BUSINESS PLANNING
APPENDIX
Appendix 4: Annual business plan template
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60
(1)
(2)
(3)
KPIs (2)
List relevant strategic outcome
Determine relevant KPI for the business plan period
Determine major initiatives required to achieve KPIs
Strategic Outcome (1)
(4)
(5)
(6)
Determine the budgeted cost
Identify who has responsibility
Identify timelines (start/ﬁnish dates) and key milestones
Strategic Initiatives(3)
2.1 Strategic actions
This section focuses on major new initiatives critical to enabling the organisation to achieve its objectives for the year.
2. BUSINESS UNIT PLAN
Cost (4)
Responsibility (5)
Timeframe (6)
(1)
(2)
(3)
(4)
(5)
(6)
KPIs (2)
Identify Key Results Areas for the business unit
Determine the KPIs for each Key Result Area
Outline the major actions required to achieve the KPIs
Determine the budgeted cost
Identify who has responsibility
Identify timelines (start/ﬁnish dates) and key milestones
Key Results Area (1)
Major Actions (3)
Cost (4)
2.2 ‘Business as usual’ activities
This section focuses on business activities that occur on an ongoing basis and do not represent signiﬁcant new strategic initiatives.
Responsibility (5)
Timeframe (6)
STRATEGIC AND BUSINESS PLANNING
APPENDIX
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Glossary
Balanced scorecard: A broad-based performance measurement tool that
complements the scorecard developed by Harvard Business School. The balanced
scorecard complements ﬁnancial measures with other operational measures.
Business as usual: Core operational business tasks of the organisation outside tasks
directed at bringing about strategic change.
Business plan: An action plan, typically with an annual timeframe, for managing
progress towards the achievement of the strategic plan.
Key performance indicators: Performance measures that, when achieved, signal
strategic outcomes have been successfully accomplished.
Key strategic challenges: Factors in the external or internal environment that have
the greatest potential to impact on the overall purpose of the organisation.
Monitoring: Collection of information to measure progress and performance against
strategic outcomes.
Planning: Process of determining what should be achieved and how to achieve it.
Purpose: The organisation’s primary reason for being (sometimes called a mission
statement).
Strategic initiatives: The actions required to enable each strategic outcome to
be achieved.
Strategic outcomes: The organisation’s high-level, longer-term deliverables.
Strategic plan: Communicates what an organisation wants to achieve in the future,
also known as its strategic direction.
Values: Cherished beliefs and principles that are intended to inspire effort and
guide behaviour.
Vision statement: An inspirational statement that captures the essence of an
ideal future.
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Strategic and Business Planning
Strategic and
Business Planning
Level 4, Dominion Building, 78 Victoria Street,
PO Box 2251, Wellington, New Zealand
Phone: +64 4 472 8058 Fax: +64 4 471 0813
www.sparc.org.nz
www.sparc.org.nz
87186 – 05/2006